Agreement opens way for Metropolitan Building deal

The Business Bank of St. Louis and Centrue Bank are still engaged in a battle over costs associated with renovating the Metropolitan Building in Grand Center, but all other parties have reached a settlement, putting the building back in contention for prospective developers.

Pyramid Cos., John Steffen, Southwest Bank, David Sabino and Stacy Hastie each reached a settlement this week with The Business Bank, which provided a $1.1 million loan to back tax credits for Pyramid’s acquisition of the building for $2 million in 2006.

Steffen, CEO of Pyramid, was in the middle of a $30 million conversion of the eight-story building at 500 N. Grand to condos and a hotel, but abandoned the project after Pyramid shut its doors in April 2008. Hastie, CEO of Environmental Operations Inc., provided environmental remediation services at the building, and accountant David Sabino was an investor.

The Business Bank is still fighting with Centrue Bank, the first mortgage holder on Pyramid’s acquisition loan, over costs associated with environmental cleanup. The Business Bank of St. Louis filed suit in St. Louis County Circuit Court in May.

Centrue Bank took ownership of the building in June, when the building was foreclosed upon. No bidders stepped forward when the building was offered for sale at auction June 13 for $3.8 million in the lobby of the Civil Courts Building.

The 100,000-square-foot Metropolitan Building is a block away from Saint Louis University and cultural institutions such as the Fox Theatre and Powell Symphony Hall. St. Louis-based DFC Group is serving as a business coordinator and working with Pyramid’s lenders and development partners to liquidate Pyramid’s real estate portfolio. A request for proposals for the Metropolitan Building has been issued, and bids are due March 1.

Several of Pyramid’s former commercial properties, which totaled more than 3 million square feet, are in the hands of new developers. Hastie, a one-time investor in Steffen’s Pyramid developments, led an investment group, SCR Investments, in the Dec. 31 purchase of the Curlee Building at 1001 Washington Ave. for $7.2 million. The 82,000-square-foot building is 76 percent leased, with restaurant Mosaic on the ground floor and six floors of office space. Office tenants include marketing firm Phoenix Creative and William B. Ittner Architects.

In addition to Hastie, other investors in SCR are Pat Kozeny, president of general contracting firm Kozeny-Wagner, and Bob Zak, principal of construction services firm Zak Cos. The $7.2 million loan for the Curlee Building that SCR obtained through Centrue Bank includes a $6.2 million mortgage and $1 million for capital improvements.

SCR also took ownership of the 375,200-square-foot One City Centre office tower at 515 N. Sixth St. from Pyramid in 2008.

Pyramid’s massive real estate portfolio is being liquidated, and only a few of its commercial properties remain to be transferred to new owners, including the vacant St. Louis Centre mall at Sixth Street and Washington Avenue and the Arcade Building at Seventh and Olive streets. All of Pyramid’s apartment properties, which totaled more than 1,000 units in Missouri and Illinois before the developer’s collapse, are under new ownership and management.

Hastie said the Curlee Building’s location in the heart of the Washington Avenue loft district makes it attractive for commercial tenants. Since relocating downtown to the Curlee last year, Claus Schmitz, owner of Mosaic, is expanding the restaurant from 4,000 square feet to 7,000 square feet later this year.